Consider the following statement by Charles Wheelan author o

Consider the following statement by Charles Wheelan, author of the Naked Economist: “The problem with Asian sweatshops is that there are not enough of them.” How is Wheelan’s statement illustrative of fundamental economic concepts?

Solution

We clearly understand the wheelen statement shows the fundamental economic concept the scarcity. We know that scarcity means that problems of having unlimited wants but the resources are limited. Under this society have ineffcient resources to full fill all the human wants. In the case of Asia, There is lack of land and land owners and the capital. The market price is determined by the demand for the product manufactured and the degree of the source of the product. Also the wage rate are very lower in Asia than any other continant in the world. So the workers are not ready to work existance wage rate. It will reduce the total production in the sweat shops. When production are decreases the total profits and investment will be lowered.

When investment are decreased then new sweatshops are not opened. This is becuase the problem of unavailability of the productive resources. It is stated by Wheeln in His statement.